Shiksha Parishad Kanya Gurukul, V. ITO,

ITA 870/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81096 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: NARESH KUMAR SINGLA
• Keywords: Charitable institution; Opportunity of being heard; Competent authority; Revised return
• Section: 12A; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 870/CHD/2014 ASSESSMENT YEAR: 2010-11 SHIKSHA PARISHAD KANYA GURUKUL, V THE ITO, SHADIPUR JULANA, JIND. DISTT. JIND, (HARYANA). PAN: AAETS9305G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NARESH KUMAR SINGLA RESPONDENT BY : SHRI S.K. MITTAL DATE OF HEARING : 16.12.2014 DATE OF PRONOUNCEMENT : 23.12.2014 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) ROHTAK DATED 15.09.2014 FOR ASSESSMENT YEAR 2010-11 IN WHICH THE ASSESSEE CHALLENGED THE ORDERS OF AUTHORITIES BELOW IN MAKING ADDITION ON RENTAL INCO ME OF RS. 322,630/- FROM SHOPS IN THE INSTITUTION BUILDING. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE FILED RETURN OF INCOME DECLARING NIL INCOME. THE ASSES SEE EXPLAINED BEFORE ASSESSING OFFICER THAT ASSESSEE SOCIETY IS F ORMED FOR EDUCATION AND FOR DEVELOPMENT IN PHYSICALLY, MENTAL LY, SOCIALLY AND SPIRITUALLY OF CHILD WOMEN. THE OBJECTS OF THE ASSESSEE SOCIETY IS PROVIDING EDUCATION AND INCOME IS PURELY APPLIED FOR 2 ACHIEVING ITS MAIN OBJECTS. IT WAS ALSO EXPLAINED THAT ASSESSEE SOCIETY GOT REGISTRATION UNDER SECTION 12A OF THE I NCOME TAX ACT. IT WAS FOUND THAT ASSESSEE HAD RECEIVED RENT AMOUNT ING TO RS. 460,900/- IN INCOME AND EXPENDITURE ACCOUNT ATTACHE D WITH RETURN OF INCOME. THE ASSESSEE WAS ASKED TO EXPLAI N WHY RENT RECEIVED MAY NOT BE TAXED WHICH IS NOT ALLOWABLE UN DER SECTION 10(23)(C) OF THE ACT. NO REPLY WAS FILED BY ASSESS EE BUT IT IS STATED THAT ASSESSEE GOT REGISTRATION UNDER SECTION 12A FOR WHICH NO EXEMPTION WAS CLAIMED UNDER SECTION 11 OR 12 IN THE RETURN OF INCOME. THE ASSESSING OFFICER, THEREFORE, MADE ADDITION FINDING THAT SINCE NO REVISED RETURN OF INCOME IS F ILED CLAIMING EXEMPTION UNDER SECTION 11 AND 12 OF THE ACT AND AC CORDINGLY, MADE THE ABOVE ADDITION. THE LD. CIT(APPEALS), ON THE SAME REASONING DISMISSED THE APPEAL OF THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND F ILED COPY OF THE ACKNOWLEDGEMENT OF FILING OF THE RETURN IN WHIC H ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10(23)(C) OF THE AC T AND CLAIMED EXEMPTION OF THE INCOME AND ULTIMATELY INCO ME IS DECLARED AT NIL. HE HAS FILED COPIES OF THE INC OME AND EXPENDITURE ACCOUNT FOR THE INSTITUTIONS OF THE ASS ESSEE TO SHOW THAT AFTER ADJUSTING EXPENDITURE OVER THE TOTAL REC EIPTS, THERE IS A DEFICIT. HE HAS RELIED UPON DECISION OF THE CALC UTTA HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX (EXEMPTION) V S SHILPAM 230 ITR 126 IN WHICH IT WAS HELD THAT A CHARITABLE TRUST IS ENTITLED TO EXEMPTION UNDER SECTION 11(4A) OF THE A CT EVEN IF IT HAS EARNED PROFIT IN A ACTIVITY I.E. BY SALE OF BOO KS. HE HAS 3 RELIED UPON DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF SANJEEVAMMA HANUMANTHE GOWDA CHARITABLE TRUST VS DI RECTOR OF INCOME TAX (EXEMPTION) 285 ITR 327 EXPLAINING TH E SCOPE OF ENQUIRY FOR GRANT OF REGISTRATION UNDER SECTION 12A OF THE ACT. 4. ON THE OTHER HAND, LD. DR RELIED ON ORDERS OF TH E AUTHORITIES BELOW AND SUBMITTED THAT SINCE NO CLAIM OF EXEMPTION IS MADE UNDER SECTION 11 OF THE ACT, THER EFORE, CLAIM OF ASSESSEE WAS RIGHTLY REJECTED BECAUSE NO REVISED RETURN HAVE BEEN FILED BY THE ASSESSEE. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSES SEE HAS FILED COPY OF THE ACKNOWLEDGEMENT OF FILING OF THE RETURN OF INCOME IN WHICH THE ASSESSEE CLAIMED ENTIRE INCOME TO BE EXEMPT UNDER SECTION 10(23)(C) OF THE ACT AND DECLA RED NIL TAXABLE INCOME. THE DETAILS NOTED IN THE INCOME AN D EXPENDITURE OF INSTITUTIONS OF THE ASSESSEE HAVE BE EN FILED TO SHOW THAT AFTER MEETING OUT THE EXPENDITURE OUT OF THE RECEIPTS, THERE IS A DEFICIT AND IN THE CASE OF SHIKSHA PARIS HAD KANYA GURUKUL, JULANA (SHADIPUR), THE INCOME IS SHOWN FRO M DONATION, RENT AND BANK INTEREST. SIMILARLY, FOR OTHER INSTI TUTIONS, THE INCOME IS SHOWN FROM GROSS FEES RECEIVED, INTEREST RECEIVED AND MISCELLANEOUS RECEIPTS, ALONGWITH GRANT RECEIVED AN D BUS CHARGES. IT WOULD SHOW THAT LIKE THE RENTAL INCOME , INCOME FROM OTHER SOURCES HAVE ALSO BEEN TAKEN INTO INCOME AND EXPENDITURE ACCOUNT FOR WHICH ASSESSEE CLAIMED INCOME TO BE EXE MPT UNDER SECTION 10(23)(C) OF THE ACT. SECTION 10(23)(C) OF THE ACT PROVIDES, THE INCOMES WHICH DO NOT FALL PART OF TOTAL INCOME AND START WITH WORDS ANY INCOME RECEIVED BY ANY PERSON ON BEHALF OF THE SUB SECTION (IIIAD) AND SUB SECTION (VI ) 4 PROVIDES FOR EXEMPTION, INCOME IN RESPECT OF ANY UN IVERSITY OR OTHER EDUCATIONAL INSTITUTION EXISTING SOLELY FOR E DUCATIONAL FOR THE PURPOSE OF AND NOT FOR THE PURPOSE OF PROFIT, AND P ROVIDES FOR THE RECEIPT SHOULD NOT BE EXCEEDING PRESCRIBED LIMIT OR APPROVAL OF THE COMPETENT AUTHORITY IS REQUIRED. IN THE CASE OF THE ASSESSEE, IT IS NOT IN DISPUTE THAT ASSESSEE SOLELY EXIST FOR ED UCATIONAL PURPOSES. THEREFORE, EVEN IF ASSESSEE HAS NOT CLAI MED EXEMPTION UNDER SECTION 11 OF THE ACT, IN THE RETURN OF INCOM E THE ASSESSING OFFICER SHOULD HAVE EXAMINED THE CLAIM OF ASSESSEE FOR EXEMPTION UNDER SECTION 10(23)(C) OF THE ACT AS MAY BE APPLICABLE IN THE CASE OF THE ASSESSEE. THE ASSESS ING OFFICER, THOUGH SPECIFICALLY MENTIONED THAT ASSESSEE'S CLAIM IS NOT ALLOWABLE UNDER SECTION 10(23)(C) OF THE ACT BUT HA S NOT GIVEN ANY FINDING IN THE ASSESSMENT ORDER. SIMILARLY, TH E ASSESSEE HAS ALSO NOT FILED COMPLETED DETAILS BEFORE THE ASSESSI NG OFFICER FOR CLAIMING EXEMPTION UNDER SECTION 10(23)(C) OF THE A CT. 6. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUM STANCES NOTED ABOVE, IT WOULD BE APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW GIVING SPECIFIC FINDING OF FACT IN THE ASSESSMENT ORDER, PARTICULAR LY WHEN ASSESSING OFFICER HAS ACCEPTED OTHER INCOME IN THE CASE OF THE ASSESSEE, THEN AS TO WHY THE RENTAL INCOME HAS BEEN DENIED EXEMPTION IN THE CASE OF THE ASSESSEE WHEN RENT IS STATED TO HAVE BEEN RECEIVED FROM THE SAME BUILDING OF THE ED UCATIONAL INSTITUTION. 7. CONSIDERING THE ABOVE, WE SET ASIDE THE ORDERS O F AUTHORITIES BELOW AND RESTORE THE MATTER IN ISSUE T O THE FILE OF 5 ASSESSING OFFICER WITH DIRECTION TO RE-DECIDE THE C LAIM OF ASSESSEE IN ACCORDANCE WITH LAW BY GIVING REASONABL E SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD DECEMBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH